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MILES O'BRIEN, CNN ANCHOR: The secretary of the state, Colin Powell, is speaking. Let's go to him. (JOINED IN PROGRESS)

POWELL: Good afternoon, ladies and gentlemen, and a slightly belated happy new year.

I thought I would start out the new year by coming down and saying a few words and taking your questions. Frankly, it was a suggestion I received before the holiday period from one of your distinguished colleagues that it is something I should do. And so here I am, always, of course, responding to the requests of the press. But it also is appropriate at the beginning of the year to, kind of, reflect on where we are in the area of foreign policy. The president has led now for almost three years a foreign policy based on values and principles: democracy, the dignity of the individual, human rights, economic freedom and openness of trading systems. And we remain committed to those principles and values.

And in the year 2004 you will see us moving even more aggressively to do everything we can to expand peace throughout the world, to expand economic opportunity to all nations in the world, for the purpose of generating wealth and opportunity for prosperity for the peoples of the world.

And pressing for freedom and openness in systems and societies around the world, not in a lecturing mode, but recognizing that we believe strongly that human rights and freedom are God-given rights and not just the purview of a particular government.

POWELL: We enter 2004 in an interesting arrangement, if I can use that word. We saw a lot of things happen over the last few months. We've seen progress in the global war against terror. We've seen greater cooperation between the nations of the world. But the challenge ahead of us is a difficult one and a long one.

And as the president said from the very beginning after 9/11, it will take a long time, it will take our best efforts and it will take working with all of our friends and partners, but with each passing day we see cells being rolled up, we see terrorists being brought to justice and we know that there is still an enemy out there that would do us ill, would do us damage and we'll be going after that enemy.

Two principal areas that we worked on last year and will continue to this year, obviously, are Afghanistan and Iraq. And Afghanistan, just in the last few days, we saw a successful constitutional loya jirga, which put in place a constitution for the Afghan people, which will now set the stage for elections in the middle of next year.

And so we see considerable progress in Afghanistan, but we are not unmindful of the dangers that still lurk there with respect to old Taliban elements. And we're working closely with our Pakistani friends to get them to use all of their assets and resources. And I was pleased to note that the Pakistani army began operations this morning that relate to that challenge.

We will stay the course in Afghanistan. We will work with our friends. We thank NATO for taking on a new mission in Afghanistan, a unique mission for NATO.

In Iraq, the challenge is clear. We are working very closely with the governing council. We have a good plan, the 15 November plan, that will result in the creation of a transitional executive branch, as well as a transitional assembly, by the middle of the year we hope.

And at the same time the State Department, at the president's direction, will be building up our capacity in Baghdad, so when the time comes, we can have a smooth transition from the Coalition Provisional Authority with sovereignty returned to the Iraqi people, then we would have an embassy to function -- a normal embassy function. It'll be a very large embassy.

POWELL: We still have a security challenge, and we saw that again today. We regret the loss of life of our brave young men and women and other coalition men and women and those civilians who have lost their lives. But they are serving in a good cause: to give the Iraqi people peace and freedom.

And what is not there anymore is a horrible, dictatorial, filthy regime that did develop weapons of mass destruction, that used them against people, a regime that filled mass graves. It is gone. It is not coming back.

The difficult work is still ahead of putting in place a new government that will be responsive to its people, but, as the president has said repeatedly, we are committed to that end and we will be successful.

We've seen some dramatic things take place within the last few days.

We saw Libya decide after many years that it wasn't worth the game, it wasn't worth the candle to continue to develop weapons of mass destruction. And as a result of very, very solid diplomacy on the part of the United Kingdom and the United States working with the Libyans, you are aware of the announcements that have been made, and we are following up to make sure that we get verified removal of those weapons and programs of mass destruction. And then we will be in conversation with the Libyans as to what the nature of our relationship will be in the future. But verify first. We've seen progress in the Sudan. You saw an announcement the other day where the negotiators in Lake Naivasha in Kenya have come to an agreement on wealth sharing. There are just one or two outstanding issues, difficult issues, having to do with disputed territories. But the key here is that after 20 years of the most terrible war, Sudanese leaders have come together and are just one or two steps short of having a comprehensive peace agreement that will bring peace to Sudan.

And I'm pleased that the United States president's personal involvement and the work of Senator Danforth and the work of a number of people here in the department and over at the NSC have brought us to this point.

Diplomacy doesn't happen overnight; it takes time, it takes dedication, it takes being prepared to accept some slip-backs as you move forward. But we see an improvement in the situation in Sudan. Take a look at what happened on the subcontinent, with the Indians and the Pakistanis reaching what has been characterized as a historic agreement the other day.

POWELL: Many of you will remember a year and a half ago, where our problem was, "Is war about to break out and might it go nuclear?" And you remember how much time the entire international community devoted to that. And yet we see this kind of progress: people desiring stability, people desiring peace.

And in the months ahead we will lend our good offices to our Indian and Pakistani friends to whatever purpose those good offices could be used to keep this process moving forward. And I had good conversations with President Musharraf and Foreign Minister Sinha of India and Foreign Minister Kasuri of Pakistan yesterday on this subject.

In Iran, we have seen some interesting developments with respect to Iran signing the additional protocol and the Non-Proliferation Treaty. And also the work that was done by my European Union colleagues from France, Germany and Britain working with the Iranians to get more of a commitment from them.

And Javier Solana is heading into Iran now, and my Japanese colleague, Foreign Minister Kawaguchi, is there now, so we're all working together to convince Iran that this is the time to eliminate these kinds of programs, and to bring whatever you are doing under full supervision, and to make sure that there is no possibility of a weapons program.

I was also taken by the quick response we got from the Iranians on the relief that we offered for the terrible, devastating earthquake -- so many lives lost. The president was quick to respond, and he gave us directions to get in touch with the Iranians very quickly and offer our assistance. And we did that. And they responded very quickly.

This is not a political breakthrough but it was nevertheless a human breakthrough, in the sense that help was offered when it was needed and it was accepted. And so we will see what happens in the future with respect to our relationship with Iran.

Liberia: Taylor is gone. And we worked with friends and partners in Africa and in the U.N. to cause that to happen, and provided just a touch of military presence and military force to ensure that Taylor would depart and that the Liberian people would be given a new opportunity.

We've used our alliances in such an important set of ways, whether it's working with our NATO allies to expand the NATO alliance, whether it's working with the E.U. as they expand the European Union, working with our West African friends in Liberia, working directly with the Russians a few weeks ago as we dealt with the challenging situation in Georgia and Tbilisi.

POWELL: And now we've had a successful election and there is a president-elect in Georgia. Our good friend, an old colleague from the Reagan days, President Shevardnadze, found it necessary to step down. And it was done in a way that did not lead to violence.

And I'm looking forward to attending the inauguration of the new president on the 25th of January, a couple Sundays from now.

In all these areas, we have worked with friends and partners. We have tried to show our ability to listen to others. We have pressed, as well, on economic opportunity and prosperity.

The president has been in the forefront of open trade, free trade. We have concluded a number of free trade agreements. We're committed to the FTAA for our own hemisphere, a subject that will get discussed, hopefully, at the Summit of the Americas next week.

The Millennium Challenge Account: We now have a terrific individual working in the department, Paul Applegarth, that will bring that program into being. And we can actually start putting out this new kind of development assistance to people, the kind of development assistance they so badly need on top of the development assistance we have already been giving them through our other programs, as well as the splendid work being done on a regular basis by USAID.

With respect to freedom, just giving people access to the basic human rights that they should have, the president made a power powerful speech at the National Endowment of Democracy talking about the God-given rights that people have and how he wants to work with countries around the world, but especially in the Middle East, to ensure that their people, in due course, at a rate and at a pace to be determined by their own leaders, understand that democracy can be theirs too, and it is not just the private preserve of Westerners and the United States.

The Middle East Partnership Initiative also blends into this.

POWELL: So as we go into 2004 I'm excited by the opportunities that are in front of us. I also know there are significant challenges.

The Middle East is a significant challenge. We have not made as much progress as I would have liked to have seen in the Middle East; far from it. And we have the president's vision on June of 2002, and we have a road map that is the way forward that's been signed up to by the parties.

What we need is, I believe, more responsible action on the part of the Palestinian Authority in order to bring terrorism under control, make sure that violence is being brought to an end. And then I think the road map can be put into use and can provide us with the way forward.

It's going to be an exciting year for us here as well, because the president, as you know, will be hosting the G-8 here later, in the summer, and we have stewardship of the G-8 process this year.

And the president is also looking forward to the NATO summit in Turkey in June, as well as the summit in Monterrey of the Americas -- mini-Summit of the Americas next week.

And there will of course be a U.S.-E.U. summit, as well as a number of other things.

All in an election year. It shows that the president is engaged and the department will be fully engaged in pursuing all of our foreign policy agenda items, focusing on expanding peace throughout the world, expanding economic opportunity that can bring prosperity to individuals, and above all pushing forward the basic concepts of freedom that we all believe in and the bedrock of America's value system and of our foreign policy.

So with that, I hope that you will be with me every step of the way for the rest of this year and into the future. And let's see what happens with the questions.

QUESTION: Mr. Secretary, can I try you on something a little less rosy than some of the things you've cited? Iraq. U.S. inspectors are pulling out.

Carnegie, in a report today, says the threat was vastly exaggerated; Iraq posed no immediate danger to the U.S. They have some recommendations, that the CIA director's job be made a career job instead of a political appointee. A lot of probables, a lot of maybes were left out by senior officials in describing what intelligence had uncovered.

Looking ahead, but also looking back, would you have rephrased your speech to the U.N. in light of all of this if you had another chance?

POWELL: No. I knew exactly the circumstances under which I was presenting that speech to the U.N. on the 5th of February. The whole world would be watching.

POWELL: And there would be those who would applaud every word and there were those who are going to be skeptical to every word.

That's why I took the time. I took the time to go out to the agency and sit down with the experts. And anything that we did not feel was solid and multi-sourced, we did not use in that speech.

The Carnegie report -- which I have not read, but I'm familiar with it from press accounts this morning -- it said that there was that capability within Iraq and they were doing these kinds of things. And they believe that we perhaps overstated it, but they did not say it wasn't there.

The fact of the matter is Iraq did have weapons of mass destruction and programs for weapons of mass destruction and used weapons of mass destruction against Iran and against their own people. That's a fact.

Now, that's back in 1988, when they used it against their own people. But throughout the '90s, when they had every opportunity to come clean, make the declarations and get right with the international community, they had the chance to respond to every one of those U.N. resolutions during the '90s, when they were threatened by President Clinton in 1998 with a bombing and they still didn't come clean, and then they caused the inspectors to have to be forced out of the country.

There is, I think, a solid case that has been made to many governments by their intelligence agencies, and that has been the consistent view of U.N. inspectors and of the United States intelligence community that this was a danger we had to worry about.

Now, in terms of intention, you always had it. And anybody who thinks that Saddam Hussein last year was just, you know, waiting to give all of this up even though he was given the opportunity to do so, he didn't do it. What he was waiting to do is see if he could break the will of the international community, get rid of any potential for future inspections and get back to his intentions, which were to have weapons of mass destruction. And he kept the infrastructure, he kept the programs intact.

Where the debate is is why haven't we found huge stockpiles and why haven't we found large caches of these weapons? Let's let the Iraqi Survey Group complete its work. There has been a movement out of some of the individuals from the group. I presume that their particular job is finished. But I'm confident of what I presented last year. The intelligence community is confident of the material they gave me; I was representing them. It was information they presented to the Congress. It was information they had presented publicly and they stand behind it. And this game is still unfolding.

QUESTION: The Palestinian prime minister said in an interview today that if the Sharon government goes forward with some of the ideas that were outlined in Prime Minister Sharon's December 18th speech incorporating some land that Palestinians see as theirs that the Palestinians would effectively abandon the idea of a two-state solution and demand full rights with the Israelis in a single state.

Do you see -- he also suggested that Sharon's ideas in that speech were tantamount to an apartheid solution and, sort of, pushing the Palestinians off into cantons.

I wonder if you think this idea of a single state has any sort of viability.

POWELL: No.

QUESTION: And what do you think about his apartheid comment?

POWELL: No, we're committed to a two-state solution. I believe that's the only solution that will work: a state for the Palestinian people called Palestine and a Jewish state, state of Israel which exists.

And what we have to do is get to a table where we can negotiate the terms of existence. I don't believe that we can accept a situation that results in anything that one might characterize as apartheid or Bantuism.

What we need right now is for the prime minister of the Palestinian Authority to get control of security forces and to use those forces and use the other tools available to him to put down terror and put down violence. And if that happens and we see that kind of commitment, then I'm confident that we can move forward on the road map.

Mr. Sharon's comments recently and some of the plans that he has talked about or have been speculated about are just that right now: plans.

Mr. Sharon begins all of his discussions by saying he would like to see a solution. He is looking for reliable partners he can work with. And his plans that he has spent some time presenting recently suggest what he feels he might have to do if he doesn't have a reliable partner.

What we are trying to do is to get that reliable partner to stand up and start acting.

QUESTION: Today in the Washington Post there was an op-ed by former national security member Ken Lieberthal on the situation in Taiwan, expressing concern that if Chen Shui-bian continues with his planned referendum, this could create a very serious situation for the U.S.

QUESTION: Somewhat critical of the administration that there was no follow-up to the very clear statements that President Bush had made when Premier Wen Jiabo was here.

Could you tell me what has the administration done to follow up there, and is there a concern that Chen Shui-bian is not hearing the message?

POWELL: Oh, he's hearing. And the president spoke so clearly and forcefully in support of our one-China policy, based on the three communiques and our responsibilities under the Taiwan Relations Act, that I don't know that he had to repeat the message.

The message was heard and received. And we will see how Taiwan works itself through the referendum idea a little later on in the spring.

But I think we've handled this very well. And when Premier Wen was here, the president gave him a solid message of reassurance with respect to our policies and what we thought the right solution was.

QUESTION: Yesterday's comment about North Korea (OFF-MIKE) North Korea authority comment. And you say maybe freezing of all aspects of a nuclear program might be a positive step. But on the other side, North Koreans are still maintaining their principle of simultaneity and requesting the energy supply or food aid or economic aid. And so maybe freezing without payment, which their commitment might be a first step either maybe during the next round of talks, sir?

POWELL: We're anxious to have the next round of talks. And hearing from my Asian colleagues, they're getting encouraging signals from the South Koreans and Chinese and the Japanese that we might be closer to the next round of talks.

But as I've also said a couple of times this week, just because we're not sitting in a guest house somewhere talking at the moment, that doesn't mean discussions and negotiations and trading is not going on and taking place.

POWELL: What is absolutely essential for us to move forward, we need a clear statement from the North Koreans that they are prepared to bring these programs to a verifiable end.

We have made it clear in response to North Korean concerns and the comments that we've received from our colleagues that security assurances are appropriate. And we believe we have good, solid ideas on how to provide those assurances.

That's the opening step and that's what we're anxious to see in the next round of talks. Then we can get into how one goes down that road and what the needs of the North Korean people are and how those needs can be addressed.

But what we can't do is say, "You have been doing things that are inconsistent with your obligations and now we're going to pay you to stop doing it."

We have to begin with, "We're not going to do it and we're not going to do it in a verifiable manner." In return for that, we will describe the kind of security assurances we will give. And they also have to make it clear that what they're doing is permanent, because we don't want to see this movie again. And then we have very solid ideas with respect to security assurances. Then things start to flow from that, but not before.

QUESTION: You and the president, Mr. Secretary, keep a certain commitment to the road map. On the other hand, there seems to be a great deal of frustration with our other three partners in the quartet. They are saying that there is total paralysis on the road map. They look at the Palestinian Authority facing total bankruptcy. They will not be able to pay the wages next month. And on the other hand we see Mr. Sharon with a plan for a state maybe on 3 (ph) percent of the West Bank.

How do you see that state? Where is it going to be?

POWELL: I've been in touch with all of my quartet partners. They are as disturbed as I am that we haven't seen the kind of progress that we'd hoped for. But they remain committed to the road map.

POWELL: I occasionally read press accounts that somebody has a new idea, but I think the road map is a good idea. It's an idea that has been accepted by the Palestinians, by the Israelis, by the Arabs, and all of those who were represented at Aqaba last year, to include the quartet.

And so I'm always willing to hear new ideas from anybody, to include my quartet colleagues, but at the moment the quartet remains solidly behind the road map.

QUESTION: Mr. Secretary, CPA released a new State Department survey of Iraqi public opinion just a short while ago. It contains one interesting finding that says that nearly a quarter of Iraqis surveyed believe that attacks on U.S. forces are actually helpful, including 31 percent in the city of Basra.

What does it say about...

POWELL: Helpful?

QUESTION: ... 31 percent...

POWELL: Helpful in the sense?

QUESTION: That's what -- this is your survey. It says that the attacks are...

POWELL: You're reading it. I mean, you're about to ask me a question on it so...

(LAUGHTER)

QUESTION: Are helpful to the Iraqis -- attacks on U.S. forces. What does it say about our efforts to win hearts and minds in Iraq if a State Department survey of public opinion over there says that such a large minority thinks these attacks are actually helping us?

POWELL: Helping them to -- well, they're not helping. The attacks are keeping going an insurgency that has as its goal denying democracy to the Iraqi people. So they're not helping.

Now, maybe this particular survey found 31 percent who felt that way, but I presume the other 69 percent felt another way.

And so what we have to do is continue to, one, show that these people are losers and they're not going to win; and our military is hard at work in that that. And we also have to show, through our reconstruction efforts and the kind of programs that are now starting to flow, that there is a better life waiting for the Iraqi people and that better life is being slowed down -- getting to that point is being slowed down by this kind of activity.

If it wasn't for these insurgent activities and this continuing resistance on the part of old regime elements or terrorists, we would be much further along and everybody would be throwing roses at our efforts as opposed to saying, "When is security going to get under control?"

So there's a better life out there waiting for the Iraqi people and we will convince them of that as they see the reconstruction money from our supplementals start to flow, as they see, I hope, the U.N. play a more important role.

POWELL: But most importantly, as they see their own security forces stand up and start to provide for security within the country and security with the cities and towns. And, finally, when they see that the November 15th plan that we now have in place and are getting as much support for as we can -- they see that that plan really does give them a timeline when they will have their sovereignty back. And it will be a happy day for them and a happy day for us.

QUESTION: Mr. Powell, on Venezuela, I just want to know what is your perception on the current relationship between the U.S. and Venezuela. And you still believe that the electoral peacefully and constitutional solution is close to Venezuela?

POWELL: It's certainly a possibility.

We've had a strained relationship with Venezuela and with President Chavez. We're pleased that a referendum took place and now the votes are being certified.

I'll have to wait for that certification, but if the certification shows that enough people have asked for the recall election, then there will be a recall election. The Venezuelan people will have the opportunity to once again express their view as to how they wish to be led, and it'll be done in a constitutional manner. And the United States supports the constitutional way of resolving this problem.

QUESTION: On the subject of weapons of mass destruction, Mr. Secretary, one of the other conclusions of that report was that there was no evidence of a connection between Saddam Hussein and Al Qaida, and that there was no evidence of a likelihood that he would transfer weapons to Al Qaida. What do you think about that, looking back?

QUESTION: And I know that hindsight is 20/20, but looking back do you think that there were ways other than war to have handled this threat and that it was not an imminent threat to the United States?

POWELL: My presentation on the 5th of February when I talked to this issue made it clear that we had seen some links and connections to terrorist organizations over time. And I focused on one particular case, Zawahiri, and I think that was a pretty solid case.

There is not -- I have not seen smoking-gun concrete evidence about the connection, but I think the possibility of such connections did exist and it was prudent to consider them at the time that we did.

Were there other ways to solve this problem? I think the president gave the international community every opportunity to solve this problem another way. The international community gave the Iraqis 12 years to solve this problem any other way.

The president took the case to the international community and said, "For 12 years you have been defied. What are you going to do now? It's time for us to act."

And the president, after a reasonable period of time -- inspectors were still being thwarted, we got an incorrect, ridiculous declaration from the Iraqi government in response to Resolution 1441, and after waiting a sufficient period of time, the president decided he had to act, because he believed that whatever the size of the stockpile, whatever one might think about it, he believed that the region was in danger, America was in danger and he would act.

And he did act and he acted with a large number of countries who felt likewise. And we acted under the authority that we were absolutely sure we had because we negotiated it that way in U.N. Resolution 1441.

QUESTION: This is on Cuba regarding two statements this week. One of them, what evidence does the U.S. have regarding the point made on Cuba's intention to destabilize the region? That's one.

And the second one, on Cuba and their relationship with Argentina, comments made by Mr. Noriega regarding Cuba being too soft or too indulgent with Cuba.

POWELL: Argentina being too soft?

QUESTION: Yes. That's a comment that Mr. Noriega made this week in New York.

POWELL: I've been in senior national positions for -- on and off over the last 17 years, and for that whole period of time Cuba has been trying to do everything it could to destabilize parts of the region. Now, fortunately, they turned out to be massive failures for the most part. But I remember very vividly my days as national security adviser in 1987 and '88 when that was a real and present danger to democracies all over the region.

We now in our wonderful hemisphere have 34 of those 35 nations democracies; different problems and different challenges for each of these democracies, but democracies. No juntas running anything, except for one place, and that's Cuba, which continues to oppress its people, which continues to deny its people a better life, and given the opportunity will stir things up. That has been his history, that has been his tradition for all these many years.

And I think Assistant Secretary Noriega was just calling it the way it is. And I think it's incumbent on those of us in the hemisphere who are committed to a community of democracies, who are committed to the documents that were signed at the Quebec Summit back in 2001, who believe in freedom, to speak out when one nation in the hemisphere denies freedom to people.

And when people express their rights they get thrown in jail for their views -- in an open manner and honest manner, they get thrown in jail for long periods of time. And we have phony elections.

And so I think Roger Noriega was speaking clearly and directly, and I know that it upset some of the Argentine leaders, and I look forward to seeing Foreign Minister Bielsa about it and discussing it on Monday in Monterrey.

QUESTION: Turkish prime minister will be here in Washington soon. And what do you expect this visit to accomplish, taking into consideration Turkey's concerns on some issues like the future of Iraq, Cyprus and E.U. accession talks?

POWELL: Well, we're looking forward to Prime Minister Erdogan's visit. And Turkey is a good friend and an ally.

POWELL: And we know they have concerns about some of the developments in Iraq, particularly PKK, as it used to be called, up in the Kurdish part of the country. And I'm sure we will discuss these issues.

But we really are delighted to see the prime minister come here so we can reaffirm the strength of the U.S.-Turkish relations.

We had some difficulties last year. We have to keep in mind, though, that when we asked the Turks to take the difficult decision of -- a brand new government with a brand new parliament to take the difficult decision of allowing U.S. troops to go through Iraq, the government, Prime Minister Erdogan, took that decision and took it to his parliament. And for a few hours we thought it had prevailed, but the parliament decided against it.

It was a disappointment. We worked through that disappointment. And when we were considering again a contribution Turkish troops a few months ago, they took that decision to the parliament again and got approval.

We subsequently determined that it would not be the right thing to do to bring Turkish troops at that time or at that place, but Turkey was standing with us.

So Turkey is a good friend. We want to be supportive of its efforts. We want to work with Turkey to see if we can find a solution to the Cyprus problem using the outline of Kofi Annan's plan. And we also want to work with Turkey and our other European colleagues as we prepare Turkey for hopefully eventual integration in the European Union.

QUESTION: Mr. Secretary, your good friend the foreign minister of Greece, George Papandreou, is assuming a leadership role in the governing party in Greece. Do you have a comment for Mr. Papandreou?

POWELL: George Papandreou is a very good friend of mine, and we have done a lot of things together over the last several years. And I congratulate the announcement he made today that he would be running for leadership of the party.

And I wish him all the best of luck, but it is a free, open, democratic election and it'll be up to the Greek people to decide which party they wish to have lead them and who the next prime minister will be. I couldn't help but notice, though, that as the news broke yesterday, there were all these wonderful pictures of George running in shorts and George jogging and George dancing.

POWELL: So the campaign has begun, clearly.

QUESTION: While over at Carnegie this morning, they were criticizing you for carrying out the president's policy. In his new book, Richard Perle along with David Frum says that you're a soft liner and you don't carry out the president's policy. He also alleges that you get overly positive coverage by the media. So I just wanted to know -- indeed -- he didn't mention any names. I wanted to know how you respond to that kind of criticism?

POWELL: I don't do book reviews. Next?

QUESTION: Yes, sir. Could you give us a little more...

POWELL: Seriously, one, I don't do book reviews. Two, if I was not carrying out the president's policies, there is only one person I'd be worried about finding that to be distasteful, and that's the president.

QUESTION: Could you give us a little about your hopes for Mr. Burns' trip to Egypt in terms of the road map and will it maybe build something?

POWELL: Bill is going out to consult with our friends in the region and I hope he can build a little momentum to get a little more pressure from Egyptians and others to place on the Palestinian Authority. They've got to get going and they have got to wrest authority away from Arafat that will allow the prime minister of the Palestinian Authority to start taking action with respect to terror and violence.

Now, the number of incidents have gone down. But there is still that potential where any one terrorist organization any day of the week can blow up any progress we've made, and I've seen it time and again over the last three years. So Bill will be encouraging them to play a more active role.

QUESTION: On immigration, yesterday President Bush made a very broad proposal on immigration. Nevertheless, the response by President Fox was that it was not enough and it was below expectations. And I believe your colleague, Derbez, said pretty much the same thing, that it wasn't enough. I was wondering if this is a disappointment for the U.S. government and if you were expecting a stronger endorsement by the Mexican president?

POWELL: No. The report I got from Foreign Secretary Derbez -- and I hope to call him this afternoon, but we did get communication from him last evening -- that he was pleased with the president's announcement and encouraged by it.

Of course, people would always like to go much, much further than, you know, the opening position. But I think the president's announcement was a bold one and dealt with a very, very important issue. And we are trying to deal with the problem of 8 million individuals who are here without documentation, who are illegal, and how can we deal with them.

We need them. They're a part of our economy. We want to give them a sense of hope and belonging. We want to make it possible for them to go back to their homes and come back into the United States.

And so, I believe the president's initiative announced yesterday is a good one, a solid one, and I know that the president looks forward to discussing it with President Fox next week.

This will be it. I've got to go.

QUESTION: In addition to all the problems that have been mentioned or the problems that were mentioned with Argentina, Venezuela, Cuba and now just with Mexican disappointment, you also have serious deterioration of the situation in Haiti where you have some experience, and also this new dispute with Brazil. And I'm wondering, as you head into the summit next week, if you think that there can be progress made hemispherically on these two issues?

POWELL: Thank you for mentioning Haiti. Invariably, it's a very long list of countries in the world. But I'm very disturbed about the situation in Haiti. And we are pressing President Aristide to take the opportunity presented by the bishop's proposal that would bring some order to the political process and provide a constitutional way forward so that the people of Haiti can express their will. And so, we're encouraging President Aristide and the opposition to take advantage of the bishop's proposal, and I'm sure this will be a subject of discussion next week as well.

With respect to Brazil, I talked to foreign minister yesterday -- Minister Amorim -- about the identification program and they were disturbed about what we did, but they knew what we did was coming.

POWELL: It's something that's required by our law.

I'm pleased that most people coming through our facilities now, whatever feelings they might have had about it, they realize it's a pretty straightforward, simple process -- two fingerprints and a picture.

In fact, it was reported to me this morning by some of the homeland security people that people are kind of enjoying the novelty of it all. But the novelty will wear off, too.

But nevertheless, it's something we have to do. Why? To protect ourselves, to know who is coming into our country. That's not unreasonable.

Now, the Brazilians in a particular case, a judge found that offensive and responded by saying, "We will now do this to all Americans." The difference is that they single out Americans whereas our program is universal except for the visa waiver people.

And so, I talked to Minister Amorim yesterday and said, Let's work our way through this and not -- it should not be the basis of a major problem between the United States and Brazil. And I think some modifications are being made in Brazil with respect to the judge's instructions.

Thank you very much.

O'BRIEN: Secretary of State of the United States of America, Colin Powell, addressing just about every hotspot you can imagine, hopscotching the world as he gives his news conference to reporters.

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